Like a lot of people, you probably made New Year resolutions or promises to yourself that you will change those parts of your life you’re not happy with.  And chances are that you have let yourself down by not acting on those promises or quickly fallen back into old habits. 

One of the reasons many New Year resolutions go unfulfilled is that we rarely take the time to think clearly about the result we want to achieve. The ultimate outcome.

When you resolve to change one of your life habits or patterns, it’s important to be totally clear about the real reason for the change.

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The new year marks the introduction of several important initiatives that home owners and first home buyers should be aware of.

First up is the arrival of home loan fact sheets introduced as part of the federal government’s banking reform legislation.

Lenders are now required to provide a fact sheet for each mortgage you may be considering. The beauty of this initiative is that borrowers can make a side by side comparison of each loan’s headline interest rate, and also each loan’s ‘comparison’ interest rate – which includes many of a loan’s fees and charges, as well as the total cost of the mortgage over the full term.

Figures from financial comparison website RateCity show that by moving from the average of the major bank’s standard variable rate of 7.30 percent to one of the cheapest comparison rates available on the market, at 6.35 percent, a borrower with a $400,000 home loan could potentially save around $240 in monthly repayments and more than $72,000 over 25 years

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The Reserve Bank’s December rate cut was initially greeted with enthusiasm by home owners. However relief quickly turned to disbelief when the big banks proved reluctant to pass on the rate cut. This chain dragging may reflect difficult conditions in global financial markets but it also reinforces the need for borrowers to do some rate cutting of their own.

The banks’ hesitation to reduce mortgage interest rates is a direct result of the debt crisis being played out in Europe. The cash squeeze is affecting the availability – and cost, of funds that banks use to supply home loans here in Australia.

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